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CBOT corn closes lower on increased farmer selling

CHICAGO: Corn futures at the Chicago Board of Trade closed lower on Friday, with pressure from increased farmer selling and profit taking weighing on prices, traders said.

Corn closed unchanged to 1-3/4 cents lower with March down 1-3/4 at $2.19.

March rose as high as $2.21-3/4 in early trading for the contract's highest price since Sept. 30.

The sharp price run-up in corn this week stirred a pickup in farmer selling around the United States, merchants said, resulting in hedging pressure on futures. Cash corn bids were steady to 5 cents lower around the Midwest early Friday. Corn futures were also oversold technically and due for a correction lower, traders said.

Commercial selling Friday was estimated at roughly 2,000 lots, reflecting the hedge selling from farmer and elevator interests.

But the market continued to show signs of life amid the bullish government numbers released this week and on some mounting talk about potential dry weather this year in the U.S. Midwest.

Corn futures climbed briefly early Friday with assistance from other CBOT markets. Soybeans jumped more than 8 cents and notched a 2-1/2-month high early and wheat rose over 3 cents to near a two-month high, both supported by weather-related concerns as well as continued fallout from Wednesday's government reports.

The U.S. Department of Agriculture cut ending 1999/2000 U.S. stocks forecasts for corn, wheat and soybeans, with corn supplies slashed 280 million bushels, or 14 percent, from a prior estimate.

The reports appeared to have revived some bullish sentiments after a prolonged bear market, traders said, as U.S. grain and soybean stocks were now considered less burdensome than previously thought. But stocks are still large by historical standards.

Open interest in corn futures rose 10,685 contracts in Thursday's session, according to CBOT estimates, after jumping 26,836 contracts Wednesday, suggesting that gains this week were fuelled by the establishment of new long positions, as opposed to the covering of shorts, traders said.

Fund buying totalled 1,500 lots. Commercials sold an estimated 2,000 lots.

E.D. & F. Man sold 3,600 March contracts and bought 1,000 March, Refco Inc sold 2,000 March, Farmers Commodities Corp. sold 700 March, 500 May and 300 July, ADM Investor Services sold 1,000 March and bought 600 July.

Corn futures volume was estimated by the CBOT at 110,000 lots, below the 146,128 lots traded Thursday.

Corn options volume was estimated at 37,000 lots. -Reuters